RETROSPECTIVE milk price step-downs should be banned and contract disputes between farmers and processors handled through a thorough complaints and mediation process, according to Australia’s peak dairy lobby.

The Australian Dairy Industry Council (ADIC), which comprises peak industry bodies Australian Dairy Farmers (ADF) and Australian Dairy Products Federation (ADPF), representing farmers and processors respectively, has submitted a draft code to the Department of Agriculture and Water Resources to be considered during the consultation process.

Under the proposed ADIC Code:

The draft ADIC code is the result of an extensive review the organisation conducted into the dairy industry’s current voluntary code and addresses the recommendations handed down by the Australian Competition and Consumer Commission (ACCC) in its report into the dairy sector.

“The ACCC identified a number of areas that need fixing and our aim is to help the Government implement a code of practice that improves the relationship between all parties,” Mr Richardson said.

Farmers and processors are encouraged to provide feedback on the code, either by attending regional meetings being organised by the federal Department of Agriculture and Water Resources, calling 1300 044 940, emailing dairycode@agriculture.gov.au or visiting the website https://haveyoursay.agriculture.gov.au/dairy-code-conduct for further information.

The Department has committed to release a detailed draft mandatory code for feedback later this year.

Media Contact:

Ashley Mackinnon, Public Affairs Manager

M: 0407 766 153

E: media@australiandairyfarmers.com.au

The Australian Dairy Industry Council (ADIC) welcomes the signing of the Indonesia-Australia Comprehensive Economic Partnership (IA-CEPA). The IA-CEPA will see the ultimate elimination of all dairy tariffs, building on the outcomes of AANZFTA – the ASEAN Australia New Zealand Free Trade Agreement, Australia’s existing trade agreement with the ASEAN member states.

Indonesia is a major destination for Australian dairy exports and ranks only behind Greater China and Japan as Australia’s third largest dairy export market on value terms. In 2017/18, Australia exported over 60,000 tonnes of dairy to that market, valued at over A$200 million.

Indonesia’s demand for dairy is set to continue to build on the back of its increasingly affluent 260 million strong population.

As Australia’s nearest neighbour with strong existing ties with our dairy industry, the conclusion of IA- CEPA will enhance the naturally emerging opportunities that are presenting themselves in Indonesia.

Specifically, the IA-CEPA will deliver the following benefits for Australian dairy exports destined for Indonesia:

• Elimination of remaining tariffs on entry into force for SMP and WMP;
• Elimination of remaining tariffs on entry into force for grated or powdered cheese; and
• Elimination by 2026 for remaining tariffs on non-liquid milk, (6% or less fat) and by 2033 for tariffs on liquid milk (6% or less fat).

Dairy is also pleased to see that that under IA-CEPA, a cooperative mechanism to enable regular discussion of non-tariff measures (NTMs) will be established. These NTMs, including measures such as licencing arrangements and product testing regulations, can be significant hurdles for Australian dairy exports into markets like Indonesia and add significant costs to doing business.

The Australian dairy industry congratulates the Australian Government and the Australian negotiators for their contribution to this positive result.

Media Contact:

Ashley Mackinnon, Public Affairs Manager

M: 0407 766 153

E: media@australiandairyfarmers.com.au

A robust and transparent test to determine the socio-economic impacts of removing an additional 450 gigalitres (GL) of irrigation water from the Murray Darling Basin is critical if the impacts to local communities are to be full understood, according to the country’s peak dairy industry body.

The Australian Dairy Industry Council (ADIC) is urging state and federal water ministers to consider any impacts the test would have on dairy jobs and local communities ahead of Friday’s Ministerial Council meeting in a bid to beef up the socio-economic neutrality test currently in place under the Murray Darling Basin Plan.

ADIC Water Taskforce Chairman Daryl Hoey said the current test was measured at an individual level rather than a community level.

“At the moment, a farmer might sell their water to the Commonwealth and because the farmer received payment, it is considered to have a positive outcome,” Mr Hoey said.

“However, there is no evaluation of what the loss of water means for the region and its future viability.

“Dairy farmers value our rivers and support the improvements that have been made to the Basin, but irrigation communities are worried the current ‘neutrality test’ does not consider community impacts when water is removed.

“Any socio-economic test must be fair for all farmers because, as it stands, local dairy dependent communities cannot tolerate more job losses.”

Data released last year by the Murray Darling Basin Authority (MDBA) revealed job losses in Basin communities of up to 40 per cent in agriculture, and up to a 60 per cent loss in irrigation employment in some regions.

The MDBA also estimated future water recovery measures would lead to a further 9 per cent slump in the gross value of irrigated production. Analysis by consultants RMCG found that milk production would be slashed by 235 million litres in the southern Basin alone, putting around 500 jobs at stake in the district.

The deal struck between the federal Government and Opposition also includes expressions of interest for on-farm projects which would involve farmers receiving funding to upgrade their irrigation practices providing they return a portion of their water to the Commonwealth.

“Unfortunately, these projects simply take irrigation water out of production. The Commonwealth and States must look for water projects that do not take water from the consumptive pool,” Mr Hoey said.

“We certainly understand the long-term desirability for all irrigation districts to be as efficient as possible. But unless individual programs can demonstrate that they will not produce negative flow on impacts for communities they are unlikely to gain support.

“Ministers should also recognise that the social and economic neutrality impact test must consider impacts beyond the farmgate. Farm services, processing and transport jobs will reduce if an on-farm efficiency project removes water from the irrigators pool. The economies of scale for dairy processing sites will be compromised and maintaining local infrastructure will become less viable”.

The ADIC will continue advocating ensuring the neutrality test is measured at a community level.

Media Contact:

Ashley Mackinnon, Public Affairs Manager

M: 0407 766 153

E: media@australiandairyfarmers.com.au

ALL options will remain open to address relations between dairy farmers and milk processors as peak representative body the Australian Dairy Industry Council moves ahead with its 12- month review of the industry’s Code of Practice.

The Code was introduced in July last year and the industry group committed at the time to undertake a review after a year to assess its effectiveness.

“ADIC is conducting a scheduled review of the Voluntary Code of Practice, which was agreed to by all state dairy farmer organisations,” ADIC Chairman Terry Richardson said.

“The review will determine how effective the Voluntary Code has been and whether it is necessary to adopt a different approach. This could be a prescribed voluntary code, mandatory code or another mechanism altogether. Nothing is off the table.”

As part of the process, the ADIC will analyse separate reports handed down by the Australian Competition and Consumer Commission (ACCC) and the federal Senate’s Economics Reference Committee.

The final ADIC report will include options to improve contract processes, increase price transparency, build industry capability and bolster the Code of Practice.

Mr Richardson said the review would involve stakeholders across the dairy supply chain to ensure the best outcome for farmers.

“The Code of Practice is a vital part of restoring relationships across industry,” he said.

“We want to ensure we get the Code right and the review process is the best way to achieve that outcome.

“At this stage it would be wrong to pre-empt the outcome of the review.” It is expected the review will be complete by the end of June.

Advocacy body Australian Dairy Farmers will then hold a series of forums aimed at educating farmers on how the recommendations will be implemented.

Media Contact:

Ashley Mackinnon, Public Affairs Manager

M: 0407 766 153

E: media@australiandairyfarmers.com.au

AUSTRALIA’S dairy industry is urging the federal Government to fight for a fair outcome in new free trade negotiations with the European Union (EU).

The Australian Dairy Industry Council (ADIC) said the Government needed to push back against excessive restrictions that could damage the value of Australian dairy exports to EU countries, which already declined by an alarming 94.3 per cent over the 10-year period to 2016, from US$45 million to just US$2.3 million.

“It is vital that the free trade agreement has benefits for both sides, considering the ease of access European dairy manufacturers have to the Australian market,” ADIC Chair Terry Richardson said.

Of particular concern are efforts to restrict the use of common cheese names, often referred to
as geographic indications of origin (GIs), which could put Australian dairy producers at a disadvantage to their European counterparts.

“We are deeply concerned that GIs will mean local manufacturers and exporters will no longer be able to use common names like Parmesan or feta because of EU GI regulations,” Mr Richardson said.

Mr Richardson said the negotiations were a unique opportunity to remove the barriers that are currently stifling dairy trade between Australia and the EU.

“These trade negotiations should allow both Australia and the EU to capitalise on an improved commercial relationship,” he said.

“But we need to ensure this deal frees up the trade relationship rather than creates technical barriers such as GIs.”

The EU’s Trade Commissioner will visit Canberra next month to formally kick off negotiations.

Media Contact:

Ashley Mackinnon, Public Affairs Manager

M: 0407 766 153

E: media@australiandairyfarmers.com.au

THE Australian Dairy Industry Council has acknowledged the release today of the final report in the Australian Competition and Consumer Commission’s inquiry into the dairy sector.

ADIC Chair Terry Richardson said the industry can rest assured that a review was currently underway of the industry’s voluntary Code of Practice.

“ADIC will take a key role in the review consultation process, which will incorporate the ACCC’s analysis,” Mr Richardson said.

“The benefit of the Code has always been that we can bring all of industry together in the one room to have an agreed set of parameters and conditions for processor contracts.

“The review was flagged at the time the Code was introduced last year, and the ADIC is committed to ensuring the review is conducted thoroughly and incorporates ACCC recommendations.”

Mr Richardson said the ADIC would also support the introduction of an independent umpire to mediate contract disputes between farmers and processors.

Media Contact:

Ashley Mackinnon, Public Affairs Manager

M: 0407 766 153

E: media@australiandairyfarmers.com.au

The Australian Dairy Industry Council (ADIC) welcomes the signing of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership CPTPP.

The CPTPP agreement will deliver an improvement in Australian dairy market access arrangements into Japan, Australia’s largest cheese export market.

Australia already has a trade agreement in place with Japan – JAEPA (the Japan Australia Economic Partnership Agreement). However, the market access provided under CPTPP delivers improvements in some areas that were excluded under JAEPA.

There will also be some improvements in market access into other markets including Mexico, Peru and Canada.

Importantly Australian dairy will maintain its competitive position into the CPTPP markets and will continue to be a key supplier into CPTPP member countries as well as an important player in dairy supply chains across the region.

The Australian dairy industry congratulates The Hon. Minister for Trade, Tourism and Investment Steven Ciobo, the Australian negotiators and all the CPTPP partner countries for their contribution to this positive result. The CPTPP has been resurrected from the former TPP agreement which appeared to reach a dead end when the United States announced that it would withdraw from the agreement in early 2017.

The CPTPP is a regional trade agreement between Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, Japan, Vietnam, Mexico and Canada.

Media Contact:

David Inall, Chief Executive Officer

M: 0427 495 255

E: dinall@australiandairyfarmers.com.au

Basin States must adopt a more flexible approach to water recovery for the sake of all communities in the Murray Darling Basin, the Australian Dairy Industry Council (ADIC) said today.

Daryl Hoey, chair of the ADIC Basin Water Taskforce, urged the States to come back to the table to consider all options for achieving the Plan, including the 450 GL ‘upwater’.

“The Basin Plan is flexible – water should be able to come from a range of projects and alternative arrangements agreed by the States. It does not have to be recovered solely from irrigators through on- farm projects. The key is that the ‘upwater’ is found without negative social or economic impacts to communities along the river,” Mr Hoey said.

Mr Hoey also warned that threats to derail the 605 GL in environmental offsets could lead to more buybacks.

“All States agreed to the offsets as a mechanism for achieving the goals of the plan when projects were submitted to the MDBA back in June,” he said. “No State should be walking away from that agreed process now.”

“The offsets will deliver better environmental outcomes than merely sending more water down the river and hoping for the best.

“If the offsets are derailed, the Commonwealth may revert to buybacks to meet even the Basin Plan’s 2750 GL target. The volume involved would be the equivalent of closing down a significant part of the Basin’s Riverland and Sunraysia irrigation districts.

“We are worried about the viability of the dairy industry along the length of the Southern Connected Basin if any water recovery targets on-farm works before fully considering off-farm mechanisms. There needs to be a holistic approach taken and it need to be led by all the State Ministers.”

“Through its commitment to adopt a standardised method of reporting compliance, with the aim of publishing a standardised set of compliance data, Murray-Darling Basin state ministers demonstrated that they can act collectively in the best interests of the Basin.

“We need our political leaders to come back to the table in good faith with a vision to act on behalf of the whole community.”

Media Contact:

David Inall, Chief Executive Officer

M: 0427 495 266

E: dinall@australiandairyfarmers.com.au

There would be few in the Australian dairy industry who have not been impacted by the work of Allan Burgess.

Whole of industry collaboration was the key theme of the annual Australian Dairy Industry Council (ADIC) Industry Leaders Breakfast today.

More than 200 of Australia’s leading dairy representatives from across the value chain, gathered in Melbourne this morning to start the conversation about a whole of industry vision and plan, and the need to provoke change.

They heard from leaders of the dairy, red meat and seafood industries on the challenges and rewards of whole of industry collaboration.

David Inall, the Australian Dairy Farmers (ADF) Chief Executive Officer, said the Breakfast provided the chance for industry to discuss how they can work together to seize emerging opportunities in global markets and food trends.

“The past couple of years has been a difficult time for the industry, but green shoots are appearing in the form of opportunities and collaborations,” Mr Inall said.

He said dairy industry efforts can be better coordinated to encourage innovation, efficiency and political advocacy.

“Through the ADIC, we have collaboration through the value chain, and now need to focus on the future and better outcomes by creating an all of industry plan and vision.

“We are now starting on a process of creating this industry vision and plan, building on existing efforts such as the strategic plans from ADF and Dairy Australia, as well as the Australian Dairy Industry Sustainability Framework.

“We need all of industry pulling together in the same direction, so we can take on our competitors.

“I believe we need a more visible and united presence in Canberra. As we move towards the next federal election, 2018 will be an important year for dairy politically, as well as operationally.”

Newly elected ADIC Chair, Terry Richardson, said: “Let’s start the conversation.”

“Collaboration is key; we have to get better at forming strategic alliances. We need to work out, together, how we can make the Australian dairy industry more successful, and not just in our own patches.

“And let’s be unapologetic about focusing on outcomes, because we need to compete with the best in the world and we have some work to do – so let’s start today.”

Media Contact:

Gabrielle Sheehan, Acting Media Officer

M: 0409 945 001

E: gabrielle@curriecommunications.com.au

The Australian Dairy Industry Council (ADIC) has welcomed news this week that the Australian Government has successfully negotiated a new trade deal with Peru.

The deal will see Australia receive improved market access for dairy in the form of an export basket quota of 7,000 tonnes of dairy product in the first year of implementation, rising by 300 tonnes per annum and peaking at 10,000 tonnes in the 10th year.

ADIC Chair, Terry Richardson, said the new agreement was a positive step forward for the industry and will provide greater opportunities for Australia to expand its export capacity.

“This is a good outcome for Australian dairy farmers and the industry in general. Historically, Peru has been a sensitive market for dairy imports, so this is a positive achievement,” Mr Richardson said.

“The Australian dairy industry is recognised worldwide for producing sustainable, premium quality products and we’re excited that this new deal will provide access to a growing market.”

Mr Richardson noted that the initial Country Specific Quota (CSQ) volume exceeds recent trading volumes, which have varied considerably over the past two decades from a high of 5,931 tonnes of dairy products exported in 2002 to a low of 92 tonnes in 2014.

All Australian dairy exports to the emerging South American market will be subject to a CSQ, in line with similar agreements Peru has in place with the EU and United States.

The new agreement will provide a greater degree of certainty for Australian exporters and ensures they will have improved access to a highly competitive market place, as well as placing Australia on a more even playing field with international competitors.

“International trade is essential for the growth of our industry. Increased market access promotes stronger demand for Australian products, which helps underpin local farmgate milk returns and provides a framework for profitable industry growth,” Mr Richardson said.

Media Contact:

David Inall, Chief Executive Officer

M: 0427 495 266

E: dinall@australiandairyfarmers.com.au